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Ownership of Intellectual Property

Wednesday, 5 December 2012

Many disputes arise out of ownership issues relating to intellectual property. Ownership issues affect all parties, large and small; from self-employed individuals, to small businesses to multinationals. Although the media focus tends to be on large disputes worth billions of dollars, such as Apple’s recent battle with Samsung, small businesses can be a fertile breeding ground for litigation.

With many people choosing to become self-employed or start their own businesses, there is plenty of opportunity for confusion as to who owns what. It is always best to seek professional advice to provide certainty but there are some simple rules that can be followed to reduce the potential for disputes.

General Rules
If a self-employed individual creates something for their own use such as a design, software, processes or a system then that intellectual property belongs to them. If it is created for someone else to use then the intellectual property rights remain theirs unless the contract setting out the terms of the use by the third party specifically assigns rights to that party. In the absence of an assignment, the third party user simply has a licence to use that intellectual property.

If the individual is self-employed but provides goods or services through a limited company then an agreement may be required to determine on what basis the intellectual property is used by that company. This can be particularly important for small start-up businesses, such as software start-ups for example, that may have different developers working at different times on a somewhat casual basis.

If an individual creates something in the course of their employment while working as an employee then the intellectual property will generally be the property of their employer unless there is an agreement to the contrary. If an individual creates something in their own time while working as an employee, this can cause problems. Generally the intellectual property will belong to the employee but the employer may have a claim over it through the employment contract if there are restrictions on pursuing activities outside the firm. The employer may also have a claim if its own intellectual property or equipment has been used in the creation of the new intellectual property.

Where a business creates intellectual property then it will own the rights. However, if the intellectual property is created for another business, the ownership will normally be determined by a contract. Even where this is to remain with the business creating the intellectual property it is usually sensible to state this explicitly in the contract. Customers who provide material of their own will normally retain the ownership of rights in that material.

Rollingsons recommends parties seek advice to ensure correct ownership of intellectual property. At Rollingsons we have experienced lawyers who can assist you. For more information please contact James Crighton via e-mail or by telephone on 0207 611 4848.